Insurance privatization vote delayed again

Plan to privatize state employees’ health care dies

During a meeting disrupted by numerous, noisy exchanges Thursday, the Jindal administration abruptly yanked a contract that would affect thousands of current and retired state workers.

Commissioner of Administration Kristy Nichols, the governor’s chief budget adviser, made the decision to remove a contract involving state employee health plans from legislators’ consideration after it became clear she lacked the necessary support.

Getting to that point took several hours that culminated in a confusing series of motions during a meeting of the Louisiana House Appropriations and state Senate Finance committees. Some House members fought to vote on the contract in a bid to defeat it. Senate members battled to defer the matter. Finally, Nichols asked to remove the contract from the committees’ agenda.

At issue is the Jindal administration’s proposal to hire Blue Cross and Blue Shield of Louisiana to handle multiple health plans at the Office of Group Benefits.

The Office of Group Benefits provides health and life insurance to about a quarter-million current and retired state employees and their dependents.

Blue Cross already handles the office’s HMO, or Health Maintenance Organization, which covers 164,000 lives. State employees at the Office of Group Benefits manage the PPO, or Preferred Provider Organization, which covers 62,000 lives.

The Jindal administration wants Blue Cross to handle both plans, arguing the move would save $20 million a year.

However the proposal is meeting resistance from PPO members who said they are happy with the Office of Group Benefits’ handling of their health insurance.

Tom Barton, whose wife is a retired state worker, told legislators that he has been covered by both the Office of Group Benefits and Blue Cross throughout the years.

He praised the Office of Group Benefits then turned his thumb downward to give his review of Blue Cross.

Retired attorney Vicki Picou, who once worked for the state, said she worries the contract is a prelude to higher administrative costs and fewer benefits for people like her.

“My husband and I live on a modest income, and we quite possibly are going to be priced out,” Picou told the panels.

A number of legislators scolded the Jindal administration for what they characterized as a failure to communicate with current and retired state workers about the proposed transition.

State Sen. Dan Claitor, R-Baton Rouge, said many retirees are on fixed budgets and fear changes will force them to make a choice between paying for prescriptions and buying groceries.

“I’ve had 240 phone calls and emails on this matter. Zero (were) favorable,” Claitor said.

State Rep. James Armes, D-Leesville, said the Office of Group Benefits already seems to run efficiently.

“I’m a simple man from a simple parish, but I’ve got common sense and I can’t understand why we’re doing this,” he said.

Nichols told legislators that school boards will save money because many school system employees receive their health coverage through the state.

House Appropriations Committee Vice Chairman Cameron Henry, R-New Orleans, wondered aloud why school board members are not calling him to say the contract is a great idea.

Scott Richard, executive director of the Louisiana School Boards Association, said his organization has received scarce information from the Jindal administration on the purported savings.

He said he would like to see the calculations since members would welcome a cost savings.

“The elephant in the room has been the lack of trust,” Richard said.

After a number of people spoke in opposition to the Blue Cross contract, Senate President John Alario suggested delaying the vote on whether to hire the company as a health care plan administrator.

“Change is difficult,” Alario, R-Westwego, said, adding that more thought needed to be given to the issue.

State Rep. Katrina Jackson, D-Monroe, made a substitute motion to vote on the contract immediately. Her motion passed on a 16-7 vote, making it clear that the Jindal administration had a wide gap in the support needed.

Because two committees were meeting jointly, someone needed to make a motion identical to Jackson’s on the Senate side. No one did.

The Senate Finance Committee then approved Alario’s motion to defer the contract decision, swinging his suggestion back to the House Appropriations Committee for approval. At that point, Nichols yanked the contract.

Later in the day, Nichols downplayed her decision in a prepared statement.

“We asked to come back to the committee because there were questions about school board savings and some confusion about voting procedure. We feel confident about the support for the measure,” she said.